Related papers: Risk Aversion in Non-Ergodic Systems
Financial asset markets are sociotechnical systems whose constituent agents are subject to evolutionary pressure as unprofitable agents exit the marketplace and more profitable agents continue to trade assets. Using a population of evolving…
Agent-based models help explain stock price dynamics as emergent phenomena driven by interacting investors. In this modeling tradition, investor behavior has typically been captured by two distinct mechanisms -- learning and heterogeneous…
We develop a model to study the role of rationality in economics and biology. The model's agents differ continuously in their ability to make rational choices. The agents' objective is to ensure their individual survival over time or,…
The high-order complexity of human behaviour is likely the root cause of extreme difficulty in financial market projections. We consider that behavioural simulation can unveil systemic dynamics to support analysis. Simulating diverse human…
The comparative statics of the optimal portfolios across individuals is carried out for a continuous-time complete market model, where the risky assets price process follows a joint geometric Brownian motion with time-dependent and…
Many biological, psychological and economic experiments have been designed where an organism or individual must choose between two options that have the same expected reward but differ in the variance of reward received. In this way,…
Previous evolutionary studies demonstrated how evaluating evolving agents in variable environmental conditions enable them to develop solutions that are robust to environmental variation. We demonstrate how the robustness of the agents can…
Human society and natural environment form a complex giant ecosystem, where human activities not only lead to the change of environmental states, but also react to them. By using collective-risk social dilemma game, some studies have…
Experience-driven self-evolution has emerged as a promising paradigm for improving the autonomy of large language model agents, yet its reliance on self-curated experience introduces underexplored safety risks. In this study, we investigate…
We present an analytical model to study the role of expectation feedbacks and overlapping portfolios on systemic stability of financial systems. Building on [Corsi et al., 2016], we model a set of financial institutions having Value at Risk…
Methods for learning optimal policies in autonomous agents often assume that the way the domain is conceptualised---its possible states and actions and their causal structure---is known in advance and does not change during learning. This…
Understanding the affective, cognitive and behavioural processes involved in risk taking is essential for treatment and for setting environmental conditions to limit damage. Using Temporal Difference Reinforcement Learning (TDRL) we…
Evolutionary graph theory is a well established framework for modelling the evolution of social behaviours in structured populations. An emerging consensus in this field is that graphs that exhibit heterogeneity in the number of connections…
In performative prediction, predictions guide decision-making and hence can influence the distribution of future data. To date, work on performative prediction has focused on finding performatively stable models, which are the fixed points…
We show that disentangling sentiment-induced biases from fundamental expectations significantly improves the accuracy and consistency of probabilistic forecasts. Using data from 1994 to 2017, we analyze 15 stochastic models and…
Governments are increasingly turning to algorithmic risk assessments when making important decisions, such as whether to release criminal defendants before trial. Policymakers assert that providing public servants with algorithmic advice…
Accuracy of economic theories and efficiency of economic policy strictly depend on the choice of the economic variables and processes mostly liable for description of economic reality. That states the general problem of assessment of any…
Empirical evidence shows that human behaviour often deviates from game-theoretical rationality. For instance, humans may hold unrealistic expectations about future outcomes. As the evolutionary roots of such biases remain unclear, we…
We construct a model of an exchange economy in which agents trade assets contingent on an observable signal, the probability of which depends on public opinion. The agents in our model are replaced occasionally and each person updates…
Decision-making societies may vary in their level of cooperation and degree of conservatism, both of which influence their overall performance. Moreover, these factors are not fixed -- they can change based on the decisions agents in the…